Correlation Between Cellnex Telecom and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Cellnex Telecom and Supermarket Income at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cellnex Telecom and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cellnex Telecom SA and Supermarket Income REIT, you can compare the effects of market volatilities on Cellnex Telecom and Supermarket Income and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cellnex Telecom with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cellnex Telecom and Supermarket Income.
Diversification Opportunities for Cellnex Telecom and Supermarket Income
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cellnex and Supermarket is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cellnex Telecom SA and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT and Cellnex Telecom is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cellnex Telecom SA are associated (or correlated) with Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Cellnex Telecom i.e., Cellnex Telecom and Supermarket Income go up and down completely randomly.
Pair Corralation between Cellnex Telecom and Supermarket Income
Assuming the 90 days trading horizon Cellnex Telecom SA is expected to generate 1.39 times more return on investment than Supermarket Income. However, Cellnex Telecom is 1.39 times more volatile than Supermarket Income REIT. It trades about -0.06 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about -0.1 per unit of risk. If you would invest 3,386 in Cellnex Telecom SA on October 30, 2024 and sell it today you would lose (166.00) from holding Cellnex Telecom SA or give up 4.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cellnex Telecom SA vs. Supermarket Income REIT
Performance |
| Timeline |
| Cellnex Telecom SA |
| Supermarket Income REIT |
Cellnex Telecom and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cellnex Telecom and Supermarket Income
The main advantage of trading using opposite Cellnex Telecom and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cellnex Telecom position performs unexpectedly, Supermarket Income can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Cellnex Telecom vs. Bell Food Group | Cellnex Telecom vs. MTI Wireless Edge | Cellnex Telecom vs. Cairo Communication SpA | Cellnex Telecom vs. Batm Advanced Communications |
| Supermarket Income vs. Ebro Foods | Supermarket Income vs. National Beverage Corp | Supermarket Income vs. MoneysupermarketCom Group PLC | Supermarket Income vs. Games Workshop Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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